Payment Providers: Choosing the right one for your business
The right payment service provider makes all the difference
Starting eCommerce operations is always a bit challenging. There are many variables that determine your ability to succeed in this segment of trade, and paying attention to detail is something that is simply a must if you want to avoid mistakes.
The factors that determine the success rate are numerous, but it is fair to say that the online payment systems pretty much define the percentage of customers that can be reached. The options available worldwide are quite numerous, and defining the right ones is not such an easy task.
Still, there are a few methods for selecting the right online payment systems that could minimize the risks and allow you to make a good choice right from the start. The most important things to consider are:
- Diversity of payment options
- Implementation costs
- Implementation speed
- Fraud protection options
Each of these elements determines the quality of the service provided, and ALL of the criteria have to be satisfied in order to carry out your e commerce operations properly.
Diversity of payment options
This segment pretty much defines everything and is the most important in order to make sure that you will be able to reach every single potential customer. All of the payment options can be split in several major groups, organized by the relevancy:
A - Standard payment options
B - Special payment options
C - Local payment options
A – Standard payment options
There are some standard online payment options that qualify the majority of customers as eligible to make purchases. Some of the world’s most popular options include Master Card, Diners Club Card, Visa, JCB, American Express card, and classic wire transfers. When you are choosing your online payment systems, these are the staple ones. It is possible to integrate them into various eCommerce platforms separately, but in most cases, this is usually done via payment gateways which provide easier implementation, as well as reduced maintenance complexity.
B – Special payment options
Special online payment systems include various online wallets. The usage of these options is on the significant rise lately, and excluding these options from your online trade operations is definitely a bad move. There are some of them which are globally present and popular, such as Bit Coin and PayPal. Of course, systems such as Skrill (previously known as Money Bookers), and ADV Cash are also popular in some countries. It is especially important for the operations with the focus on certain geographies. ADV Cash is extremely popular in Russian Federation and the countries of the ex-USSR, while Skrill is extremely popular in the UK and some other European countries. It means that those specific geographies should be covered with the mentioned payment options as it would significantly increase your conversion rates. Luckily, there are payment gateways that allow using these options through their own systems, so the integration and especially maintenance costs can be significantly reduced.
C – Local payment options
Finally, there are a few payment options that are available locally, just in specific geographies. These options in most cases lean heavily on the local bank systems and include cash on delivery option, and payments in instalments.
Implementing these payment solutions into your online stores definitely depends on the culture in certain countries. While these variants are not too important in countries such as UK or USA, it is almost impossible to consider serious operations in Turkey or Spain without them.
Implementation cost of certain online payment solutions are in strict relation to the eCommerce platform you choose as the backbone of your online business. The complexity of implementation depends on both the payment solution provider and eCommerce platform provider. The possibilities vary on a rather high scale.
Custom code online stores are often the most expensive ones, as the integration of the payment provider has to be done from scratch.
With the standard eCommerce platforms the case is somewhat better. In some cases, especially in the SaaS segment, there are quick connectors that allow relatively fast and cheap integration (best examples of such platforms are Shopify, Big Commerce, or Kooomo). The downside of this approach is that the integration is already pre-made by the platform provider and adding new features that might have been released and the upgrade of the connector has to be carried out by the platform owners. Additionally, most of those platforms do not have connectors for all the payment providers, and it might end in unavailability of the desired payment gateway.
Finally, the semi-open source and open source platforms (best examples are Magento, SAP Hybris, and Sales Force Commerce Cloud) often come with ready-made connectors that require somewhat simplified integration. The great positive of this approach is that it allows maintenance and integration by the internal teams or web agencies, but these platforms are usually very expensive and integration follows the same pace in terms of finances.
Implementation speed of various online payment systems depends on their complexity, e commerce platform complexity, and the predefined model of integration.
With SaaS solutions the integration times are very short. In some cases it even works as a plug and play solution.
With open source platforms, the integration can take anywhere from a few working days to a couple of weeks. In most common cases, which include Magento development, the speed of integration also depends on your Magento web developer. The best companies in this segment have substantial experience in all sorts of Magento development operations and they can provide fast and reliable service.
As with any other product or service, the reliability is THE most important segment. There is little to no use at all of the payment processing options if the service providers can’t provide continuous 24/7 operations.
Most of the leading payment processors have uptime that is near to 100% of the time, and these variants are always the best to pursue. Most of the problems in this segment occur with the payment service providers that are focused on local market with low technology development rates. Also, systems that are connected to local banking networks are more prone to unreliable services.
Also, it is necessary to make sure that the payment processor of your choice covers all the currency options you intend to use.
The best way to be sure that the payment gateway of your choice will do the trick for your business is to ask the experts. Web development agencies with substantial experience in eCommerce operations are more than capable of giving you a reliable feedback on all the options you might be considering.
Not all payment processors are able to cover all geographies! There are examples of great companies that are limited to certain countries or continents. The main goal when picking the option for your online store is to identify the payment processor that will be able to follow your expansion to new markets and provide services to your current clients.
Many of the leading platforms operate globally, with just a few countries as exceptions. Again, it is best to talk to your web developers. They have better connections with payment processors and they are able to get answers faster and make sure there will be no obstacles down the road once you start developing your online store.
Fraud prevention options
Fraud prevention becomes increasingly important in all online trade operations, as the hi-tech crime rates are on the rise all over the globe. Many payment processors have their own fraud prevention systems that allow you to monitor risky transactions and make decisions upon them. The others lean on different specialized services such as Kount, Chargeback, or Riskified and provide their own integration to those systems.
No matter which option they decided to pursue, it is of the utmost importance that these services are present, especially if you have the intention to trade online internationally. There are entire Mafia like organizations in certain countries that make their living using stolen credit cards, and you don’t want to be one of their “customers”.
In order to prevent fraudulent transactions, you can opt for the managed service by 3rd parties (digital agency that covers your merchandising and customer support, or the specialized managed service provided by fraud prevention companies).
Now that all these elements have already been taken into consideration, you should make a roadmap to making a decision on the right payment processor to implement into your eshop. This is best done by following a few simple steps:
1 – What: Define your target market for present and near future.
Why: By defining your target you will be able to make the first shortlist of payment service providers.
How: Compare your targeted geographies with the availability of services there.
2 – What: Define payment methods you want to use.
Why: This is being done in order to further shorten the list. If certain PSPs don’t provide all the payment options you need, they should be waived as unfit for your operations.
How: Simply compare the desired options with the provided ones.
3 – What: Determine your implementation budget.
Why: This is necessary in order to avoid overpaying of implementation and integration.
How: Consult with your web developer agency. They will give you the estimate of implementation costs and you will be able to make a more accurate estimation on the investment.
4 – What: Check the quality of services provided by the PSPs.
Why: This will prevent you from signing in with the payment solution provider that has any kind of technical problems.
How: Again, consult with your web developers. They have certain experience and will be able to give you a good advice.
Once you have passed through all those steps, you will be pretty safe from making critical errors that might endanger your business.
In order to be really successful in this segment, it is of the utmost importance to have good advisors with the solid knowledge of the options available on the market. Consultancy agencies and web developers with a lot of experience in this field are the best choices for this. Even if you do have strong internal teams to make the analysis of all the elements required, it is far cheaper and requires far less time if you take the process to the professionals who are focused solely on the web development.
Studioworx is just an ideal partner for this. We do have a very extensive experience in all segments of eCommerce operations, and our recommendations are always proven and tested over and over again. We are in constant contact with numerous payment service providers and various eCommerce platforms, and we have the insight in all the latest movements in the field. This allows us a unique perspective on the industry, and enables us to make quick and very precise projections based on solid experience and proven methods of deciding.
If you opt for us, we will be able to take a good look at your entire endeavour and help you choose the solutions that will be the best fit for you.
We have completed numerous projects using the SaaS (Software As A Service) platforms, and we know which payment providers work best with certain platforms. Also, we have a significant portfolio of Magento development projects and are at the very top of the ladder concerning available Magento web designer companies in the UK.
ECommerce platforms are not a limiting factor in our case. We have been working using various options for over 600 clients over the past few years. We are able to provide a full service for your business, but we can also cover just the parts of the operations you lack the resources for.
If you would like to get a free introductory call with us on any of the issues mentioned, feel free to contact us on [email protected]. We will be able to answer all of your questions and propose you the way to carry out your eCommerce operations in a way that will ultimately result in success!